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#1 VA Lenders Handbook (Pamphlet 26-7) Page 338

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Appraisal Process 10-3 1. Appraisal Process Summary Change Date March 11, 2019 • This chapter has been revised in its entirety. a. Purpose Appraisals are performed to protect the…

VA Lenders Handbook (Pamphlet 26-7) · VA-Lender-Handbook.pdf · Page 338 · View at official source (VA.gov — Appraisers/Staff Appraisal Reviewer) →

Appraisal Process 10-3 1. Appraisal Process Summary Change Date March 11, 2019 • This chapter has been revised in its entirety. a. Purpose Appraisals are performed to protect the interests of Veterans, lenders, servicers and VA. b. Appraisals Requested Online Authorized requesters may order appraisals online in WebLGY only after a Certificate of Eligibility (COE) has been requested. In most cases, VA will automatically assign an appraiser on VA’s fee appraiser panel to perform the appraisal. c. Appraisal Guidelines The fee appraiser will estimate the market value of the property in accordance with the Uniform Standards of Professional Appraisal Practice (USPAP) and VA appraisal guidelines. The appraiser will note any readily apparent repairs needed for the property to meet VA’s Minimum Property Requirements (MPRs). d. Appraisal Review The completed appraisal report will be uploaded into WebLGY and electronically scored by VA’s Appraisal Management System (AMS). A Staff Appraisal Reviewer (SAR) employed by a lender or servicer, or VA staff, will review the appraisal and issue a Notice of Value (NOV) to the Veteran. e. Oversight VA staff performs oversight by conducting desk and field reviews of completed appraisals and NOVs.

#2 VA Appraisal Guidelines (Ch. 11) Page 13

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-13 7. Selection and Analysis of Comparable Sales, Continued e. Location Comparable sales should be located as close to the subject as practical. Their proximity to the subject…

VA Appraisal Guidelines (Ch. 11) · ch11.pdf · Page 13 · View at official source (VA.gov — Appraisers/Staff Appraisal Reviewer) →

-13 7. Selection and Analysis of Comparable Sales, Continued e. Location Comparable sales should be located as close to the subject as practical. Their proximity to the subject (such as three blocks north) must be described. Generally, blocks should be used in cities and miles in rural areas to locate properties. The appraiser must adequately explain any reliance on sales located either: • further from the subject than similar recent comparable sales readily available in the subject neighborhood, or • outside of the subject’s market area. Note: In some rural areas, comparable sales may be 5, 10, or 20 miles away from the subject property and still be within the subject’s immediate market area. f. Value Adjustments To be in a condition acceptable to VA, properties must meet VA’s Minimum Property Requirements (MPR) (see chapter 12). Since MPR repairs identified in the appraisal report must be completed as a condition of the report, value adjustments to the comparables are to be made as if the repairs to the subject have been accomplished. Generally, good comparables require minimal adjustment for individual feature differences and a minimal total net adjustment. The appraiser must adequately explain large adjustments. Adjustments based on some factor other than market reaction, such as builder costs for materials, project development, etc., are not generally acceptable.

#3 VA Minimum Property Requirements (Ch. 12) Page 3

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Requirements 12-3 1. Minimum Property Requirement Procedures Change Date October 18, 2019 • This chapter has been revised in its entirety. a. MPRs VA has established Minimum…

VA Minimum Property Requirements (Ch. 12) · Ch12_Minimum_Property_Requirement_NEW 2022 02 17.pdf · Page 3 · View at official source (VA.gov — Construction and Valuation) →

Requirements 12-3 1. Minimum Property Requirement Procedures Change Date October 18, 2019 • This chapter has been revised in its entirety. a. MPRs VA has established Minimum Property Requirements (MPRs) to protect the interests of Veterans, lenders, servicers, and VA. Properties must meet these requirements prior to guaranty of the loan by VA. b. Appraisal is Not a Home Inspection While VA-assigned fee appraisers must note any readily apparent repairs that are needed, it is important to distinguish the differences between a real estate appraisal and a home inspection report. The fee appraiser will not perform operational checks of mechanical systems or appliances. The fee appraiser estimates the value of the property to ensure that it is sufficient for the amount of the proposed loan. c. Safe, Sound, Sanitary MPRs help ensure that the property is safe, structurally sound, and sanitary. The scope of MPRs also includes issues related to the property’s location and legal considerations. d. Appraisal Subject to Repairs to meet MPRs The appraiser will prepare origination appraisals “subject to” the completion of any MPR repairs that appear to be needed and include the contributory value of the completed repairs in the estimated market value. Liquidation appraisals are prepared “as-is” (see Chapter 11, Topic 20 of this Handbook). e. Recommend Repairs, Not Inspections Appraisers must not prepare appraisals subject to inspections. The appraiser must recommend repairs, not inspections, for any conditions that do not appear to meet MPRs. f. Cosmetic Items The appraiser should not recommend repairs of cosmetic items, items involving minor deferred maintenance or normal wear and tear, or items that are inconsequential in relation to the overall condition of the property. While minor repairs should not be recommended, the appraiser should consider these items in the overall condition rating when estimating the market value of the property. Continued on next page

#4 VA Lenders Handbook (Pamphlet 26-7) Page 1

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VA Minimum Property Requirements — "Change 46" Update Summary VA Lenders Handbook (Pamphlet 26-7), Chapter 12 Source: VA News, "VA updates home loan appraisal requirements to help…

VA Lenders Handbook (Pamphlet 26-7) · VA_MPR_Change_46_Summary_2026.txt · Page 1 · View at official source (VA.gov — Appraisers/Staff Appraisal Reviewer) →

VA Minimum Property Requirements — "Change 46" Update Summary VA Lenders Handbook (Pamphlet 26-7), Chapter 12 Source: VA News, "VA updates home loan appraisal requirements to help Veterans compete in today's housing market" https://news.va.gov/147642/va-updates-home-loan-appraisal-requirements/ Effective: May 1, 2026 IMPORTANT NOTE ON THIS DOCUMENT: this is a SUMMARY of the change, sourced from VA's own public news release, NOT the full official redlined chapter text. VA's primary distribution point for the complete, current Chapter 12 text is the KnowVA portal (knowva.ebenefits.va.gov), which is a JavaScript- only system that does not render for automated tools AND was independently confirmed broken/unusable by Kelly T Wade clicking it in a normal browser. No alternative static/downloadable PDF of the full revised chapter could be located as of July 27, 2026. This summary should be used to tell users WHAT changed and WHY, with a link back to the VA News source, until a usable full-text source is found. Do not represent this as the complete chapter text. WHAT CHANGED (VA's own summary): VA updated its appraisal process regarding Minimum Property Requirements (MPRs) to reduce delays, cut outdated rules, and help Veteran homebuyers move faster in a competitive housing market. Specific changes: - Removed the full Radon Gas requirement (Topic 34). - Revised standards for properties built before 1978 (Topic 32). - Revised standards for properties built in 1978 or later (Topic 32). - Streamlined guidance on detached improvements and Specially Adapted Housing (SAH) Regional Loan Center jurisdiction (Topic 1). - Updated guidance for non-vented heaters (Topic 23). VA is also adjusting appraisal fees in select regions to stay competitive and maintain a qualified pool of experienced appraisers (see separate VA fee schedule documents for specifics, if available). WHY IT MATTERS: as of May 31, 2026, the average VA appraisal took approximately seven business days; these changes are part of VA's ongoing effort to keep that timeline moving and align appraisal requirements with current housing standards and federal directives. NEXT STEP FOR CHIEF APPRAISER: replace this summary with the full official redlined Chapter 12 text as soon as a working source is found — check back periodically, or ask a VA-side contact (e.g., a lender or SAR who has KnowVA access) whether they can export/share the current chapter text.

#5 HUD/FHA Single Family Handbook 4000.1 Page 208

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A. Title II Insured Housing Programs Forward Mortgages 3. Underwriting the Property Handbook 4000.1 181 Last Revised: 11/26/2025 3. Underwriting the Property The Mortgagee must…

HUD/FHA Single Family Handbook 4000.1 · HUD_FHA_4000.1.pdf · Page 208 · View at official source (HUD.gov — SFH Handbook 4000.1) →

A. Title II Insured Housing Programs Forward Mortgages 3. Underwriting the Property Handbook 4000.1 181 Last Revised: 11/26/2025 3. Underwriting the Property The Mortgagee must underwrite the completed appraisal report to determine if the Property provides sufficient collateral for the FHA-insured Mortgage. The appraisal and Property must comply with the requirements in Appraiser and Property Requirements for Title II Forward and Reverse Mortgages. The appraisal must be reported in accordance with Acceptable Reporting Forms and Protocols. a. Property Acceptability Criteria (06/27/2025) The Mortgagee must evaluate the appraisal and any supporting documentation to determine if the Property complies with HUD’s Property Acceptability Criteria. Existing and New Construction Properties must comply with Application of Minimum Property Requirements and Minimum Property Standards by Construction Status. i. Defective Conditions The Mortgagee must evaluate the appraisal in accordance with the requirements for Defective Conditions. When defective conditions exist and correction is not feasible, the Mortgagee must reject the Property. The Mortgagee may only approve a Property after the Mortgagee confirms that all defects reported by the Appraiser have been corrected. ii. Minimum Property Requirements and Minimum Property Standards As the on-site representative for the Mortgagee, the Appraiser provides preliminary verification that a Property meets the Property Acceptability Criteria, which includes HUD’s Minimum Property Requirements (MPR) and Minimum Property Standards (MPS). Minimum Property Requirements refer to general requirements that all homes insured by FHA be safe, sound, and secure. Minimum Property Standards refer to regulatory requirements relating to the safety, soundness, and security of New Construction. When the Appraiser’s observation of a Property reveals noncompliance with the Property Acceptability Criteria, the Appraiser must note all repairs necessary to make the Property comply with HUD’s Property Acceptability Criteria, together with the estimated cost to cure. If the Appraiser cannot determine that a Property meets HUD’s MPR or MPS, the Mortgagee may obtain an inspection from a qualified entity to make the determination. Mortgagees must use professional judgment in determining when inspections are necessary to determine that a property meets MPR or MPS. Mortgagees must also use professional judgment in determining when a Property condition poses a threat to the health and safety of the occupant and/or jeopardizes the soundness and structural integrity of the Property, such that additional inspections and/or repairs are necessary.

#6 HUD/FHA Single Family Handbook 4000.1 Page 1843

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Appendix 8.0 – FHA Defect Taxonomy (01/15/2025) Handbook 4000.1 1816 Last Revised: 11/26/2025 Defect Area 1 (continued) Servicer Operations (SO) Severity Tiers Remedies 1…

HUD/FHA Single Family Handbook 4000.1 · HUD_FHA_4000.1.pdf · Page 1843 · View at official source (HUD.gov — SFH Handbook 4000.1) →

Appendix 8.0 – FHA Defect Taxonomy (01/15/2025) Handbook 4000.1 1816 Last Revised: 11/26/2025 Defect Area 1 (continued) Servicer Operations (SO) Severity Tiers Remedies 1 Life-of-Loan Indemnification 2 Forward • Correct any reporting issues and provide documentation showing Borrower was notified of any changes in writing. • FHA will accept a 5-Year indemnification agreement for unqualified mortgage assumptions that otherwise meet HUD eligibility requirements. • FHA will accept documentation showing a principal reduction for Findings related to incomplete property repairs or rehabilitation. If the Property does not meet HUD’s Minimum Property Requirements (MPR) or Minimum Property Standards (MPS), FHA will request a principal reduction made before, and in addition to, Life-of-Loan indemnification. • 1-Year indemnification is used for general servicing violations that cannot otherwise be addressed with mitigating documentation or corrective action at the loan level. HECM • Document the completion of repairs to bring the Property into compliance with HUD’s MPR and MPS. • For HECM violations, Life-of-Loan indemnification is the only available remedy in LRS if the Servicer is unable to provide mitigating documentation and/or complete corrective action.

#7 VA Appraisal Guidelines (Ch. 11) Page 1

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-1 Chapter 11. Appraisal Requirements Overview Introduction This chapter contains information about appraisal requirements. In this Chapter This chapter contains the following…

VA Appraisal Guidelines (Ch. 11) · ch11.pdf · Page 1 · View at official source (VA.gov — Appraisers/Staff Appraisal Reviewer) →

-1 Chapter 11. Appraisal Requirements Overview Introduction This chapter contains information about appraisal requirements. In this Chapter This chapter contains the following topics. Topic Topic description See Page 1 Using This Information 11-2 2 VA Reasonable Value 11-3 3 VA Appraisal Requirements 11-4 4 Appraisal Report Contents 11-6 5 Submission of Appraisal Reports 11-9 6 Approaches to Value 11-11 7 Selection and Analysis of Comparable Sales 11-12 8 Other Market Analysis Considerations 11-14 9 Minimum Property Requirements and Repairs 11-17 10 Remaining Economic Life of Improvements 11-18 11 Proposed Construction 11-20 12 Other Property Types and Situations 11-22 13 Liquidation Appraisals 11-27

Chief Appraiser Picks · Related Video The VA's Minimum Property Requirements (MPRs) Explained

Chief Appraiser Says Reading the actual guideline text below — never a general AI guess

Here's what VA Minimum Property Requirements actually mean: We establish these standards to make sure the property is safe, structurally sound, and sanitary before VA will guarantee the loan—protecting both you and the lender. When an appraiser looks at the property, they note any repairs needed to meet these requirements, and you have to complete those repairs before the loan closes; the appraiser then includes the value of those completed repairs in the final property valuation. We're clear that an appraisal is not a home inspection—the appraiser won't test all your mechanical systems or appliances, but they will identify any readily apparent repairs that are needed. The appraiser won't require inspections, only repairs, and they won't flag minor cosmetic items or normal wear and tear. HUD/FHA follows the same general approach: properties must be safe, sound, and secure, with all defects corrected before approval. Straight from VA Lenders Handbook (Pamphlet 26-7), VA Appraisal Guidelines (Ch. 11), VA Minimum Property Requirements (Ch. 12), and HUD/FHA Single Family Handbook 4000.1 — nothing added.

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